Wednesday, February 4, 2009

Dorel Industries 2

Today I am going to look at what analysts are saying about this stock (TSX-DII.B). Is it a good buy now? The first thing I looked at was insider buying and selling. There seems to be lots of selling and no buying. Insider selling does not tell you much, but if the stock was really undervalued, you think that there would be some buying. However, management has signaled that they have faith in the company by increasing the dividend.

In looking at earnings, everyone seems to expect that Dorel will have a good year in 2008. However, they also seem to expect that the earnings for 2009 will not be as good as for 2008. We are in a recession, so lowered earnings going forward is expected.

Looking at the ratios on this stock, higher Graham Price than stock price, lower current P/E than 5 year average and higher yield all points to this stock being at a good price. However, some of these better ratios is because of the Canadian Dollar being worth less than it was at the end of 2007. In 2007, the Canadian Dollar was on par with the US Dollar. Currently our Canadian Dollar will only buy $.80 in US Dollars. This is important as this stock reports in US Dollars.

As far as the ratings go on this stock, there are lots of both Buy ratings and Hold ratings on this stock. It depends where you look as to whether the mean rating is a Buy or a Hold. (See my site for information on analyst ratings.)

Looking at the charts, this stock has done worse than the TSX and TSX Consumer Staples Indexes over the last 5 and 10 years. For the last year and last 3 years, it has done better than the TSX, but not the Consumer Staples Index. Looking year to date, it has done worse than both indexes. Personally, I am going to keep an eye on this stock, but I am not going to buy any of it currently.

Dorel Industries Inc. is a world class juvenile products and bicycle company. Dorel’s branded products include Safety 1st, Quinny, Cosco, Maxi-Cosi and Bébé Confort in Juvenile, as well as Cannondale, Schwinn, GT, Mongoose and SUGOI in Recreational/Leisure. Dorel’s Home Furnishings segment markets a wide assortment of furniture products, both domestically produced and imported. Dorel has facilities in seventeen countries, and sales worldwide. Its web site is See my spreadsheet at I have updated my spreadsheet for the 3rd Quarterly Report on this stock.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on my web site.

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